DIPLOMA IN PLANTING INDUSTRY MANAGEMENT

LEGAL, ETHICAL AND SOCIAL ISSUES IN

PLANTATION: AGR255
TITLE: ‘MORE EPF WITHDRAWALS MAY CAUSE LONG-
TERM WOES’

NAME : MUHAMMAD AZRI BIN ZAINUDDIN

STUDENT ID : 2020476314

GROUP : RAT1104F

LECTURER’S NAME : MADAM NUR FIRDAUS BINTI

ABDUL RASHID
SUMMARY OF THE ARTICLE

The withdrawal of Employees’ Provident Fund that allowed by the government should not be
boasted as it will cause problems in the future or old age. Financial adviser Felix Neoh said
Malaysia people should not use their retirement money and he stated that business owners make a
profit cause of low wages to employees. Even though the minimum wage has been raised for
workers, this remains a problem for workers and employers. The salary is not enough for some
employees such as those who have families while some employers complain to pay that much
salary. In addition, The Goods and Services Tax or we known as GST is a good system, but it is
not used properly. Wealth adviser Liza Rawiah Ishak said it is the one of the ways to overcome
the financial problems of Malaysians after the pandemic of Covid-19, but they should remember
if they make a withdrawal, they need to commit to saving again. The Malaysia people should
control their money properly and if the money still not enough, they must supplement their income
by working part-time or starting a small business. In conclusion If Malaysians wish to retire
comfortably, they must assume responsibility of their financial management.

KEY ISSUES/PROBLEMS FROM THE ARTICLE

There are several problems in this article. The main problem in this article is many Malaysians
misuse the opportunities provided by the government. The opportunity meant is that all valid
Employees’ provident fund (EPF) registrants can withdraw their money of RM 10 000 from their
account. This will be worse for those with lower incomes which is RM 3000, or we known as B40
group. It is because the amount of money in their EPF account may not be as much as those with
a salary of 5000 and above. When these people use this opportunity without a good direction, it
will have a bad effect on them in the future. For example, when someone working in the private
sector must need this EPF money in old age and if the B40 group use too much of their EPF money
in their youth, they will probably struggle in old age.

Next, the other problem in this article is when financial adviser Felix Neoh said the most business
owners take advantage of employee salaries by placing very low wages on employees. When this
problem persists, the Employees’ Provident Fund money that comes in each month will be less to
the employees. The minimum wage allocated by the government to all workers in Malaysia is RM
1500. However, there are some employers who refuse and complain to pay that much wage to
workers. He said business owners were prospering but workers were not. This can be the cause for
many employees to use the EPF money. This problem is not only confined to Malaysia but also
most developed countries. This issues must be to prevent and avoid because it is not unfair for the
employers and employees.

Besides, the government has imposed a tax on all Malaysians and this tax will have a positive
impact on the national economy. The tax is known as the Goods and Services Tax (GST) but this
tax was repealed on 1 June 2018. Therefore, GST has been replaced with another tax called sales
and services tax on 1 September 2018. The problem that included in this article is politicians use
the tax as self -interest and this is a very unfair thing to Malaysians and the absence of GST tax
during the pandemic had a very bad effect on the country’s economy. The government believes
the answer is the Goods and Services Tax (GST), a divisive consumer tax that was implemented
in 2015 and produced RM44 billion in revenue in 2017. Malaysia lost an average of RM2.4 billion
per day during the first Movement Control Order (MCO) in 2020 when the Covid-19 outbreak
struck. Therefore, the government is trying their best to return the GST tax to Malaysians.

Lastly, after retirement, workers rely entirely upon their EPF savings and have no other sources of
income, it is possible that poverty levels among the elderly will rapidly increase. This is because,
many workers do not have a large amount in their EPF account, especially if they have withdrawn
some of the money various purposes during their working years and their wages during their
working years were relatively low. People are living longer after retirement and at the same time,
medical cost are increasing. Many employees withdraw their money from the fund when they
reach 55 years of age, then spend most or all of the money within one or two years.

RECOMMENDED SOLUTION

There are many solutions to overcome the problems above. Firstly, back to the first problem which
is many Malaysians misuse the opportunities provided by the government. The opportunity meant
is that all valid Employees’ provident fund (EPF) registrants can withdraw their money of RM 10
000 from their account. Whoever withdraws their EPF money, they need to save it again and do
part-time job, so that they do not struggle in old age. Next Malaysians who want to use EPF money
need to think carefully or discuss with close people such as parents, and wives before making a
decision. This is very important because from the discussion they can distinguish their intentions
whether to use the money for needs or wants.

Next, the second problem that need to overcome is most business owners take advantage of
employee salaries by placing very low wages on employees and some employers not paying wages
to employees in the prescribed amount. If the Employer fails to pay its employees' full
compensation within 7 days following the final day of any salary payment period each month, the
Employer is in breach of Section 19 of the Employment Act 1950. This matter needs to be resolved
in court fairly. In addition, employees can also make a reminder letter to the Department of labor
due to earning a low salary and not in accordance with the amount that has been set. Lack of pay
can affect the amount of money an employee gets in the EPF and when it happens to some people,
they should think carefully to use their EPF money.

Besides, the other problem from the article are politicians use the tax as self -interest and this is a
very unfair thing to Malaysians and the absence of GST tax during the pandemic had a very bad
effect on the country’s economy. The solution is the government should take action against all
political groups who take advantage of the people’s money. This can be a major cause for people
to take advantage of using EPF money. Malaysians also have the right to say in their rights and
need to vote for new politicians carefully in the next election. Elected politicians must have the
characteristics of being wise and able to help the people when they are in difficult situation.

Lastly, to prevent many people from falling into poverty when old age is workers are encouraged
to save and invest while they are still able to do so. Employers also may offer a higher rate of
contribution to the EPF which is an attractive benefit to employees as they can expert to enjoy a
more comfortable retirement. Some employers encourage loyalty to the organization by
contributing well above the required minimum amount once the employee has served an agreed
number of years.

CONCLUSION

In conclusion, the best solution from the first issue is Malaysians who want to use Employees’
Provident Fund (EPF) money need to think carefully or discuss with close people such as parents,
and wives before making a decision to use their EPF money. This is because to prevent them from
regretting in old age. Next, the best solution from the second issue is employees should make a
reminder letter to the Department of labor due to earning a low salary and not in accordance with
the amount that has been set. Lack of pay can affect the amount of money an employee gets in the
EPF and when it happens to some people, they should think carefully to use their EPF money.
Lastly, the best solution from the third issue is Malaysians have the right to say in their rights and
need to vote for new politicians carefully in the next election. Elected politicians must have the
characteristics of being wise and able to help the people when they are in difficult situation.

APPENDIX

Appendix 1: page 1 of the

article (screen capture)

Appendix 2: page 2 of the

article (screen capture)
Appendix 3: page 3 of the
article (screen capture)

Appendix 4: page 4 of the

article (screen capture)

Appendix 5: page 5 of the

article (screen capture)
REFERENCE

1. Ali, S. (n.d.). 'More EPF withdrawals may cause long-term woes'. www.thesundaily.my.
Retrieved June 15, 2022, from https://www.thesundaily.my/home/more-epf-withdrawals-
may-cause-long-term-woes-EC9105273
2. Vidya Radja. (2021, January 8). Here's what you can do if your salary is delayed or not
credited. The Better India. Retrieved June 15, 2022, from
https://www.thebetterindia.com/246809/salary-delayed-employee-company-punishment-
companies-act-labour-commissioner-relief-law-ipc-information-vid01/
3. Tan, W. by L. (n.d.). Selected EPF members to receive RM10,000 from 18 April 2022.
Remnant. Retrieved June 15, 2022, from https://www.humanresourcesonline.net/selected-
epf-members-to-receive-rm10-000-from-18-april-2022
4. Alex Cheong Pui Yin. (2022, April 1). EPF special RM10,000 withdrawal: What to know
before applying. RinggitPlus. Retrieved June 15, 2022, from
https://ringgitplus.com/en/blog/retirement-planning/epf-special-rm10000-withdrawal-
what-to-know-before-applying.html